Linking the 'Recovery and Resilience Plan' and Smart Specialisation. The Italian Case - JRC TECHNICAL REPORT
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JRC TECHNICAL REPORT
Linking the ‘Recovery and Resilience
Plan’ and Smart Specialisation.
The Italian Case
JRC Working Papers on
Territorial Modelling and Analysis
No 10/2022
Authors:
Prota, F.
Viesti, G.
2022 Joint
Research
CentreThis publication is a Technical report by the Joint Research Centre (JRC), the European Commission’s science and knowledge service. It aims to provide evidence-based scientific support to the European policymaking process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of this publication. For information on the methodology and quality underlying the data used in this publication for which the source is neither Eurostat nor other Commission services, users should contact the referenced source. The designations employed and the presentation of material on the maps do not imply the expression of any opinion whatsoever on the part of the European Union concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Contact information Name: Anabela M. Santos Address: Edificio Expo, C/Inca Garcilaso 3, 41092 Sevilla (Spain) Email: anabela.MARQUES-SANTOS@ec.europa.eu Tel.: +34 95 448 71 61 EU Science Hub https://ec.europa.eu/jrc JRC130071 Seville: European Commission, 2022 © European Union, 2022 The reuse policy of the European Commission is implemented by the Commission Decision 2011/833/EU of 12 December 2011 on the reuse of Commission documents (OJ L 330, 14.12.2011, p. 39). Except otherwise noted, the reuse of this document is authorised under the Creative Commons Attribution 4.0 International (CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/). This means that reuse is allowed provided appropriate credit is given and any changes are indicated. For any use or reproduction of photos or other material that is not owned by the EU, permission must be sought directly from the copyright holders. All content © European Union, 2022 (unless otherwise specified) How to cite this report: Prota, F. Viesti, G. (2022). Linking the ‘Recovery and Resilience Plan’ and Smart Specialisation. The Italian Case. JRC Working Papers on Territorial Modelling and Analysis No. 10/2022, European Commission, Seville, JRC130071. The JRC Working Papers on Territorial Modelling and Analysis are published under the supervision of Simone Salotti, Andrea Conte and Anabela M. Santos of JRC Seville, European Commission. This series mainly addresses the economic analysis related to the regional and territorial policies carried out in the European Union. The Working Papers of the series are mainly targeted to policy analysts and to the academic community and are to be considered as early-stage scientific papers containing relevant policy implications. They are meant to communicate to a broad audience preliminary research findings and to generate a debate and attract feedback for further improvements.
Linking the ‘Recovery and Resilience Plan’ and Smart
Specialisation. The Italian Case
Francesco Prota and Gianfranco Viesti
JRC TEL REPORT
JRC Working Papers on Territorial Modelling and Analysis No 10/2022
Contents
Abstract ........................................................................................................................................................................ 3
Executive Summary ................................................................................................................................................... 4
1. Introduction and methodological approach ...................................................................................................... 6
2. The Italian context in a snapshot ........................................................................................................................ 8
3. The Italian NRPP ................................................................................................................................................. 11
3.1. Structure of the Plan .................................................................................................................................... 14
3.2. Implementation ............................................................................................................................................ 17
3.3. Territorial structure of the NRRP ............................................................................................................. 18
4. NRPP, research and innovation: directly linked investments ....................................................................... 19
4.1 The overall picture ........................................................................................................................................ 19
4.2 Directly linked measures: Transition 4.0 ................................................................................................... 23
4.3 Directly linked measures: Start-ups ............................................................................................................ 23
4.4 Directly linked measures: Research and research-business collaboration ............................................ 24
4.5 Directly linked measures: Participation in European programmes ....................................................... 26
4.6 Directly linked measures: industrial promotion ....................................................................................... 27
4.7 Directly linked measures: Promotion tools ............................................................................................... 29
4.8 Directly linked measures: Intellectual property ........................................................................................ 30
5. NRPP, research and innovation: indirectly linked investments.................................................................... 30
15.1 The framework .............................................................................................................................................. 30
5.2 Indirectly linked measures: digital citizenship ........................................................................................... 33
5.3 Indirectly linked measures: education ........................................................................................................ 33
5.4 Indirectly linked measures: active labour market policies ....................................................................... 34
5.5 Indirectly linked measures: digital infrastructures .................................................................................... 34
5.6 Indirectly linked measures: Special Economic Zones ............................................................................. 35
5.7 Indirectly linked measures: promotion of the green and digital economy ........................................... 35
6. Smart specialisation strategies in Italy: revisions and challenges .................................................................. 36
7. Conclusions ........................................................................................................................................................... 58
References.................................................................................................................................................................. 60
Appendix ................................................................................................................................................................... 61
2Linking the ‘Recovery and Resilience Plan’ and Smart Specialisation. The
Italian Case
Francesco Prota * and Gianfranco Viesti *
francesco.prota@uniba.it
gianfranco.viesti@uniba.it
* University of Bari Aldo Moro, Italy
Disclaimer: The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission.
Version: 30 May 2022
Abstract
This study aims at analysing possible synergies between the Italian National
Recovery and Resilience Plan and the Smart Specialisation Strategies for 2021-
2027 of Italian regions. Although Smart Specialisation Strategies are not
explicitly mentioned in the Plan, we found that sixteen initiatives have a strong
link with S3s priority areas, and thirty-one initiatives can be classified as having
a medium link. For the remaining initiatives the potential links are weak.
Much can be done to increase coherence between S3 and recovery projects,
even a posteriori, by considering how the two planning processes complement
one another. Obviously, the effective achievement of synergies between the
Italian National Recovery and Resilience Plan and the regional Smart
Specialisation Strategies will depend on many factors; in particular, a good
policy mix and the involvement of relevant regional actors within the
governance of the Plan.
Keywords: Recovery and Resilience Plan; Smart Specialisation Strategies;
Covid-19 crisis; Innovation; Public policy; Italy.
JEL Classification: H50; O30; R10
Acknowledgement: The author would like to thank Francesco RENTOCCHINI, Andrea CONTE and Fernando MÉRIDA
(European Commission, Joint Research Centre) for their support and valuable comments, for their extensive review on earlier
versions of this report.
3Executive Summary
This study aims at analysing possible synergies between the Italian National Recovery and Resilience Plan
(NRRP) and the regional Smart Specialisation Strategies (S3s) for 2021-2027. This analysis is particularly
relevant in the Italian case given the huge resources of the NRRP and the need for a structural
transformation of the productive structure of many regions.
In this report we adopt the methodological approach followed in Marques Santos (2021) to analyse the
alignment of investments in the Portuguese Recovery and Resilience Plan with the Smart Specialisation
Strategies priorities. This methodology is applied to the Italian case to understand how (and to what extent)
the investments envisaged in the Italian NRRP can directly or indirectly support the implementation of
the S3s priorities in the various regions.
The Italian NRRP is by far the largest in Europe, amounting to €235.6 billion. In addition to investments,
it also includes several reforms on which the Italian government relies heavily. The Italian government
expects the NRRP to provide an important stimulus to economic growth from 2021 to 2026, as a direct
effect of spending. Possible structural increases in productivity in the medium-long term are more difficult
to estimate as they will depend on the ability of the Plan to influence the behaviour of businesses and
citizens.
In the programming period 2014-2020, Italy had adopted a multi-level approach to Smart Specialisation
with twenty-one regional strategies and one national strategy. For the new programming period 2021-2027,
the European Commission has dedicated the bulk of its budget to promoting a Smarter Europe through
the confirmation of the smart specialisation approach and has requested national and regional authorities
to update their S3s. The elaboration of the new strategies has proceeded slowly since Italian regional
administrations were mainly focused on addressing the consequences of the pandemic. More in general
recovery money planning has overloaded administrative capacity at the expense of Structural Funds
planning which faces delays. The analysis of the specialization areas selected in the available S3s and the
priority thematic areas into which each strategy is divided shows some continuity with the previous S3s in
the identification of priority themes. The influence of the new priorities of the European Commission in
favour of a greener, digital and inclusive economy is however evident in all regional Smart Strategies.
After identifying the actions in the Italian NRRP directly and indirectly related to R&D and Innovation
investments and matching them with Smart Specialisation priorities for 2021-2027, we estimate that about
28 percent of the Plan could potentially support the achievement of the Italian regions Smart Specialisation
Strategies objectives. Direct support actions account for €40 billion, while indirect support initiatives
account for €25 billion.
Although Smart Specialisation Strategies are not explicitly mentioned in the NRRP, we found that sixteen
initiatives have a strong link with S3s priority areas. These are mainly included in two components: “M1C2
4Digitisation, Innovation and Competitiveness component of the productive system” and “M4C2 From
Research to Business”. Thirty-one initiatives can be classified as having a medium link. For the remaining
initiatives the potential links are weak.
It is also expected that the reforms which are an essential part of the Plan could help in addressing the
obstacles that hamper innovation.
Much can be done to ensure coherence between S3 and recovery projects, even a posteriori, by considering
how the two planning processes complement one another. Obviously, the effective achievement of
synergies between the Italian National Recovery and Resilience Plan and the regional Smart Specialisation
Strategies will depend on many factors; in particular, a good policy mix and the involvement of regional
actors within the governance of the NRRP which, as we have shown, has a top-down structure.
51. Introduction and methodological approach
This study aims at analysing possible synergies between the Italian National Recovery and Resilience Plan
(NRRP) and the regional Smart Specialisation Strategies (S3s) for 2021-2027.
As known, the NRRP presented by Italy is by far the largest in Europe, amounting to €235.6 billion.
Besides the investments, it envisages a consistent reform package. In the intentions of the Italian
government, the NRRP should constitute a game changer in the inertia which has characterized the last
twenty years of Italy’s economy. The country has in fact experienced a period of persistent economic
stagnation mainly due to the decline of productivity, which in turn is largely driven by a series of structural
deficiencies afflicting both the private and public sector (Giordano and Zollino, 2021). In the short-term
the aim of the NRRP is to repair the economic and social damages caused by the health crisis, but in the
medium/long-term, the Plan should tackle the weaknesses that have been weighing down on Italy’s
economy and society for decades: the long-standing inequalities between the country’s geographical areas,
gender inequality, weak productivity growth and a low rate of investment in human and physical capital,
as well as driving a comprehensive ecological transition.
Theoretically, the Smart Specialisation Strategies should foster the development of innovative activities
and enable regions to transform themself by developing new competitive advantage based on their specific
strengths, potentials and opportunities (Foray, Eichler and Keller, 2021).
The possible overlap between NRRP and S3s is evident to the extent that the investments envisaged in
the Plan can address the obstacles that limit the regions' innovative potential. (1) It is therefore important
to analyse whether these investments are actually coherent with the strategic priorities identified in the
regional S3s. This analysis is particularly relevant in the Italian case given the huge resources of the NRRP
and the need for a structural transformation of the productive structure of many regions.
In this report we adopt the methodological approach followed in Marques Santos (2021) to analyse the
alignment of investments in the Portuguese Recovery and Resilience Plan with the Smart Specialisation
Strategies priorities. We apply this methodology to the Italian case to understand how (and to what extent)
the investments envisaged in the Italian NRRP can directly or indirectly support the implementation of
the S3s priorities in the various regions.
More in details, the steps we follow are as follow:
Identify the actions in the Plan directly and indirectly related to R&D and Innovation investments
(by direct linkage we mean the investments that can financially support any phase of innovative
(1) It is useful to recall that over the 1999-2019 period, the low level of investment, especially in the public sector,
was one of the factors that hindered the growth of the Italian economy. The investment component of the NRRP
aims to address this challenge, focusing resources on measures that should help to increase the country's growth
potential in the long term.
6projects that are aligned with Smart Specialisation priority areas, while by indirect linkage we mean
the investments that may address any barrier, obstacle or challenge affecting the regional
innovation ecosystem)
Categorise R&D and Innovation actions in the NRRP by thematic areas. If no information is
available, the action is considered with a potential benefit for all the innovation priorities of the
strategies
Regionalisation of investments (when information available) to identify which regions at NUTS 2
level will benefit from them. If no information is available regarding the localisation of the
investment, it is categorized with a potential benefit for all the regions. Nevertheless, if the
investments are targeted for specific economic activities, regionalisation can also be related to the
territorial sectorial concentration
Identify S3 innovation priorities for the 2021-2027 period for each Italian region
Draft a map to identify potential links between the NRRP and the Smart Specialisation Strategies.
Links are classified into three categories: strong, medium, and weak (Table 1)
Table 1. Summary of the criteria to classify the link intensity between NRRP and S3s
Criteria Strong () Medium () Weak ()
Not only actors of the regional Not only targeted for actors of the
Only actors of the innovation ecosystem, but actions regional innovation ecosystem
Final
regional innovation are related to the mitigation of a and/or priorities areas of Smart
beneficiaries ecosystem main known barrier to innovation Specialisation
activities
RRP investment Aligned with S3 Aligned with S3 innovation Aligned with S3 innovation
area or sector innovation priorities priorities priorities
Location of the Below the average or non-existent in
investment Above the average Close to the average the territory but the region can
(% Total) benefit from its results
Source: Table 3 in Marques Santos (2021)
Box 1. New Generation Initiative and Recovery and Resilience Facility (RRF)
The NRRP is designed within the European framework of the New Generation Initiative (NGEU) and
the consequent Recovery and Resilience Facility (RRF). The Plan is financed, for the first time, by joint
European borrowing that relies on the Member States’ future contributions to the EU Budget, for
approximately €800 billion: approximately €338 billion in grants and approximately €386 billion in loans.
NGEU identifies common goals, which are translated into common allocation for the beneficiaries
towards green and digital transition. It destines resources to the Member States, both as grants and as
loans, based on indicators related to their economic problems and to the impact of the Covid-19 pandemic.
In this way, it is particularly beneficial to the Mediterranean countries, starting with Italy and Spain, which
have been allocated particularly substantial resources. NGEU accompanies the EU budget allocations for
the period 2021-2027, for approximately €1.2 billion, defined during 2021 with approval of the new
7“Financial Perspectives”. All NRRPs contain implementation and spending objectives to complete along
a timeline, which will be checked by the European Council and are preliminary to the disbursement of the
subsequent instalments of payment.
The report is organized as follows. Section 2 briefly presents the context of the impact of the Covid
pandemics in Italy and the framework of its regional economies. Section 3 presents the Italian NRPP, with
a particular focus on its possible territorial impact. Section 4 provides an in-depth analysis of the Plan with
regards to the S3, listing its investments that are directly linked to research and innovation activities,
presenting their sectoral and, when available, territorial coverage. Section 5 contains the same analysis for
investment that may be considered indirectly linked to research and innovation. Section 6 presents a first,
provisional framework of the S3 in the Italian regions.
2. The Italian context in a snapshot
The Covid-19 pandemic, started at the beginning of 2020, has severely affected global economy due to the
sudden combination of demand and supply shocks as well as due to the severe implications on the health
care systems. (2) This is particularly true in the European countries such as Italy, one of the countries that
was hit the hardest by the first wave of the pandemic crisis with a drop in GDP of ten percentage points
in 2020 compared to the previous year (Figure 1).
Furthermore, in Italy the regional impact of the recession has been highly heterogeneous due to the sectoral
structure and therefore the relative importance of the sectoral activities most exposed to the COVID-19
shock, such as tourism, and the long-lasting economic and social divide between the North and the South
(Ascani, Faggian and Montresor, 2021).
As well known, Italy has been characterised by a strong North–South divide since the country’s political
unification in 1861, with the Southern part of the country, commonly referred to as the “Mezzogiorno”,
constantly lagging behind (Fina, Heider and Prota, 2021). Regional territories greatly differ in terms of
population, per capita gross domestic product, employment, and innovation performance (see Table A1
in appendix). In particular, only seven regions are classified as “strong innovator” according to the regional
innovation scoreboard, the regional extension of the European innovation scoreboard. (3)
In the aftermath of the pandemic, the Italian SMEs suffered the most from the situation. Figure 2 provides
a breakdown of the most pressing problems faced by SMEs in the period April-September 2020, i.e.,
immediately after the outbreak of the pandemic. Finding customers and cost of production and labour
(2) On 22 April 2020, Italy was the third country in the world by the number of reported COVID-19 infection cases,
and the second by the number of deaths among the infected patients.
(3 ) https://ec.europa.eu/info/research-and-innovation/statistics/performance-indicators/regional-innovation-
scoreboard_en
8were the most urgent problems for Italian firms. The fifteen percent of SMEs expressed the most urgency
concerning the “Other” category, within which the COVID-19 pandemic is the main issue. After a year
this percentage has risen to sixteen percent.
Figure 1. GDP change by selected European countries (index 2010 = 100)
120.0
115.0
110.0
105.0
100.0
95.0
90.0
85.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
European Union - 27 countries (from 2020) Italy Germany Spain
Source: Authors’ elaboration based on Eurostat data
Figure 2. Most pressing problems for SMEs in Italy
April to September 2020 April to September 2021
0% 5% 10% 15% 20% 25% 0% 10% 20% 30%
Availability of skilled staff or 14% Availability of skilled 21%
experienced 19% staff or experienced 27%
Cost of production and 17% Cost of production 19%
labour 12% and labour 13%
Competition 10% Competition 10%
9% 9%
Finding customers 21% Finding customers 16%
21% 18%
Regulation 9% Regulation 10%
12% 11%
Access to finance 14% Access to finance 8%
10% 7%
Other 15% Other 16%
18% 14%
Italy UE27 Italy UE27
Note: Percentages in the figure indicate the percentage of SMEs that
consider a specific problem to be the most urgent.
Source: Authors’ elaboration based on Survey on the Access to Finance of Enterprises
9According to the Community Innovation Survey, before the pandemic, the main obstacles to innovation
activities in Italy were mainly related to high competition and high costs (Figure 3). These two obstacles
were reported by both innovative and non-innovative firms.
Uncertain market demand, difficulties in obtaining public grants or subsidies and lack of external finance
are other relevant obstacles to innovation activities for innovative firms.
Figure 3. Enterprises by hampering factor for innovation activities, Italy - 2018
Different priorities within the enterprise 8.3 14.2
Lack of access to external knowledge 4.25.3
High competition 15.9 19.9
Uncertain market demand 11.4 14
Difficulties in obtaining public grants or subsidies 10.311.6
Lack of collaboration partners 4.65.7
Lack of qualified employees within enterprise 8.5
8.9
High costs 13.9 16
Lack of external finance (credit or private equity) 8.810
Lack of internal finance 12.513.8
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0
Non innovative enterprises Innovative enterprises
Note: Percentage of firms that have indicated the level of importance of hampering factors as high.
Source: Own elaboration based on Community Innovation Survey
More in general, the “dwarfism” of the Italian productive system is strictly interrelated to the ability of
firms to adopt new technologies in order to develop innovation of products and processes and invest in
human capital. These features of Italian industries profoundly affect the average productivity of the
economy. (4)
(4) Had Italy had the same firm size structure as Germany, its average labour productivity would have been more
than 20 percentage points higher, surpassing the German level. Differences in the sectoral composition between the
two countries have a much smaller role in explaining the low productivity of Italian firms.
103. The Italian NRPP
The Italian NRRP is by far the largest in Europe, amounting to €235.6 billion. There are three reasons for
this:
1. the allocation criteria assign large amounts of EU funding to the country (€191.5 billion) (5)
2. Italy is the only large EU Member State that has completely activated not only the grant component
of NGEU (€68.9 billion), which is the largest of the entire Union together with Spain, but also the
entire loan component of the RRF (€122,6 billion), unlike France, Germany, Spain, or Poland (Figure
4)
3. at the same time, the Italian government has programmed the use of other resources into the NRRP:
European funds (from the REACT-EU programme, valid for 2021-2022 as “a bridge between the
programming of the Structural Funds 2014-2020 and 2021-2027”, for €13.5 billion); a Complementary
Fund (CF), relying on national budget resources, amounting to €30.6 billion. The implementing decree
of the Complementary Fund has allocated a further €10 billion (not included among the previous
allocations) for the railway network.
(5) https://ec.europa.eu/info/sites/default/files/1_en_annexe_proposition_part1_v15.pdf
11Figure 4. NRPP of Member States
Submission date Financial Maximum Share of Ratification of
allocation (indicative) maximum Own Resources
requested financial (indicative) Decision
(grant/loan) allocation grant allocation
(grant/loan*) in general
governmental
expenditure
(2019)**
Belgium (BE) 1/5/2021 5.9/- 5.9/32.8 2.4%
Bulgaria (BG) 6.3/4.2 28.4%
Czechia (CZ) 2/6/2021 7.1/- 7.1/14.3 7.7%
Denmark (DK) 30/4/2021 1.6/- 1.6/21.9 1.0%
Germany (DE) 28/4/2021 27.9/- 25.6/240.9 1.6%
Estonia (EE) 1/1.9 9.1%
Ireland (IE) 28/5/2021 1/- 1/18.7 1.1%
Greece (EL) 28/4/2021 17.8/12.7 17.8/12.5 20.5%
Spain (ES) 30/4/2021 69.5/- 69.5/84.8 13.3%
France (FR) 29/4/2021 40.9/- 39.4/168.4 2.9%
Croatia (HR) 15/5/2021 6.4/- 6.3/3.7 24.7%
Italy (IT) 1/5/2021 68.9/122.6 68.9/122.7 7.9%
Cyprus (CY) 17/5/2021 1/0.227 1/1.5 11.2%
Latvia (LV) 30/4/2021 1.8/- 2/2 17.1%
Lithuania (LT) 15/5/2021 2.2/- 2.2/3.2 13%
Luxembourg (LU) 30/4/2021 0.093/- 0.1/2.8 0.4%
Hungary (HU) 12/5/2021 7.2/- 7.2/9.7 10.8%
Malta (MT) 0.3/0.8 6%
Netherlands (NL) 6/55.3 1.8%
Austria (AT) 1/5/2021 4.5/- 3.5/27.2 1.8%
Poland (PL) 3/5/2021 23.9/12.1 23.9/34.8 10.7%
Portugal (PT) 22/4/2021 13.9/2.7 13.9/14.2 15.3%
Romania (RO) 14.2/15 17.6%
Slovenia (SI) 1/5/2021 1.8/0.7 1.8/3.2 8.6%
Slovakia (SK) 29/4/2021 6.6/- 6.3/6.3 15.7%
Finland (FI) 27/5/2021 2.1/- 2.1/16.4 1.6%
Sweden (SE) 28/5/2021 3.2/- 3.3/6.3 1.4%
Notes:
Calculation of the maximum loan that can be requested by each Member State is based on the ceiling of 6.8% of 2019 GNI
(Article 14 of the RRF Regulation). See: First Recovery and Resilience Dialogue with the European Commission,
Directorate-General for Internal Policies, European Parliament, May 2021.
** Calculation based on Eurostat data.
Source: European Commission, Eurostat and Parliament’s Directorate-General for Internal Policies.
The NRRP precisely sets out the timing for spending this money from 2021 to 2026; in relation to this,
the decision with which the EU approved the Italian Plan envisages progressive allocations as the targets
and the milestones are met.
However, not all this sum activates new investments. In the text of the NRRP it is stated that the total
contains €69.1 billion for “loans for existing projects”; during 2021 the precise magnitude of this figure
has been revised. These funds are devoted to projects already financed by national resources. However,
12the NRRP does not provide a detailed list of these projects; this suggests caution in the Plan’s allocation
of funds for the various measures, given that some investment funding include resources, in some cases
substantial, that were already allocated. There are two reasons for this: (1) since these projects are already
in progress, Italy can report to the EU on the state of progress already made during the earliest years of
the Plan; (2) it “returns” substantial resources to the national budget in such a way as to reduce the impact
of the NRRP on the national debt. In this context it must be noted that the NRRP “borrows”
approximately €20 billion from the Development and Cohesion Fund (Fondo Sviluppo e Coesione, FSC),
which funds the national cohesion policy (6).
According to the official text, the total sum of €235.6 billion is composed as follows: RFF €191.5 billion,
of which grants (68.9), loans for new projects (53.5), loans for existing projects (69.1); React-EU €13.5
billion; Complementary Fund €30.6 billion.
At the same time, it must be considered that the NRRP investments are additional with respect to the
normal Italian budget allocations and to the other European policies. It is particularly important that the
NRRP is additional to the European Structural and Investment Funds (ESIFs) available in Italy for 2021-
2027. Those are larger than in the previous planning period, especially in the Centre-North. On December
22nd, 2021, the final draft of the Italian Partnership Agreement for the ESIFs 2021-2027 has been officially
approved and sent to the EU Commission. It will be essential for national and regional operational
programmes to be different from those of the past, to take account of the complementarity with the
NRRP. This might reinforce the impact of the NRRP. However, some caution is needed, due to the
following reasons:
1. the EU definition of Structural Funds (SF) Regulations has been delayed, more than in the past, for
the very reason that the Commission offices have concentrated their priorities on the NRRP. This
means that spending of the SF will start with a considerable delay already accumulated
2. implementation of the NRRP will place a considerable extra burden of work on the administrations
involved in the SF
3. there may be a priority to include the most of completed investment projects in the NRRP, given the
need to close the whole Plan by mid-2026 (while the deadline to certify ESIFs expenditures is end
2029.
The Italian government foresees that the NRRP will provide an important stimulus to the economic
growth from 2021 to 2026, as a direct spending effect. It is difficult to estimate possible structural increases
in productivity caused in the medium-long term by the investment; and this will depend greatly on the
Plan’s effects on the behaviour of companies and citizens (Table 2).
(6) The budget of the Development and Cohesion Fund will be replenished, albeit partially after 2027.
13Table 2. Macroeconomic impact of the Italian NRRP (percentage deviations from the base scenario)
2021 2022 2023 2024 2025 2026
GDP 0,5 1,2 1,9 2,4 3,1 3,6
Private consumption -0,2 -0,6 -0,6 0,0 1,0 1,9
Total investments 2,8 7,6 11,6 12,5 11,8 10,4
Import 0,2 1,0 1,9 2,7 3,4 4,0
Export -0,2 -0,5 -0,2 0,6 1,6 2,7
Source: NRRP
3.1. Structure of the Plan
In addition to investments, the Plan also includes several reforms (e.g., justice, public administration,
competition) on which the Italian government is particularly reliant, and these also have a precise timeline
of milestones. The Plan also includes two other important areas of reform: taxation and social welfare.
The NRRP covers practically all public policies in Italy. The entire implementation of the Plan, investments
and reforms, will have a quantitative and qualitative influence on the Italian policies throughout the 2020s.
For example, there will be important consequences of the new investments envisaged by the NRRP on
the need of current central and local expenditure necessary to implement the new services (in many
spheres, from urban transport and railways to nursery schools, to the health service); at present there are
no estimates or indications to this regard.
The structure of the NRRP has been affected by its preparation process, which was particularly complex
for several reasons: (1) the relatively short time available between approval of NGEU (July 2020) and
delivery of the Plan to the EU Commission (April 2021); (2) a lack of previous long-term programming in
many important areas of public intervention (from industrial policies to the health service) to use as a
framework; (3) the need to tackle the pandemic and emergency economic interventions at the same time;
(4) the change of government.
The Plan has a similar structure to the Plans of the other EU Member States, following the guidelines
given by the Commission. It has 6 broad Missions: digital transition; green transition; infrastructures for a
sustainable mobility, education and research, inclusion and cohesion, health (Table 3).
14Table 3. Components of Italy's NRRP
Mission (M) Component (C) RRF resources (€ billion) Share
Mission 1: Digitalisation, M1C1. Digitalisation, innovation and security in 9.7 5.1%
innovation, competitiveness, the public administration
culture and tourism M1C2. Digitalisation, innovation and 23.9 12.5%
competitiveness in the production system
M1C3. Tourism and culture 4.0 6.7 3.5%
Mission 2: Green revolution M2C1. Circular economy and sustainable 5.3 2.7%
and ecological transition agriculture
M2C2. Renewable energy, hydrogen, grid and 23.8 12.4%
sustainable mobility
M2C3. Energy efficiency and renovation of 15.4 8.0%
buildings
M2C4. Protection of land and water resources 15.1 7.9%
Mission 3: Infrastructures for M3C1. Investments in the rail network 24.8 12.9%
sustainable mobility
M3C2. Intermodality and integrated logistics 0.6 0.3%
Mission 4: Education and M4C1. Strengthening the provision of education 19.4 10.1%
research services: from crèches to universities
M4C2. From research to business 11.4 6.0%
Mission 5: Inclusion and M5C1. Employment policies 6.7 3.5%
cohesion
M5C2. Social infrastructure, households, the 11.2 5.9%
community and the third sector
M5C3. Special interventions for territorial 2.0 1.0%
cohesion
Mission 6: Health M6C1. Local networks, facilities and 7.0 3.7%
telemedicine for local healthcare
M6C2. Innovation, research and digitalisation of 8.6 4.5%
the national health service
Total 191.5
Source: European Commission, SWD(2021) 165.
The six Missions are articulated in sixteen Components (further sub-divided into forty-three areas of
intervention for coherent projects), plus forty-nine sectorial reforms. However, the division into Missions
is indicative because the content of each one is relatively heterogeneous.
Table 4 reports the contribution of each Component of the Italian Plan to the pillars of the Recovery and
Resilience Facility Regulation.
15Table 4. Coverage of the six pillars of the Recovery and Resilience Facility by the Italian NRRP components
Green Digital Smart, Social and Health and Policy for the
transition transformation sustainable territorial economic, next
and inclusive cohesion social and generation
growth institutional
resilience
M1C1 Digitisation,
Innovation and Security
component of the Public
Administration
M1C2 Digitisation,
Innovation and
Competitiveness component
of the productive system
M1C3 Tourism and Culture
4.0
M2C1 Green Business and
Circular Economy
M2C2 Energy Transition and
Sustainable Local Mobility
M2C3 Energy Efficiency and
Requalification of Buildings
M2C4 Protection and
Enhancement of Land and
Water Resources
M3C1 High-Speed Rail and
Road Maintenance
M3C2 Intermodality and
Integrated Logistics
M4C1 Enhancement of Skills
and Study Support
M4C2 From Research to
Business
M5C1 Employment Policies
M5C2 Social infrastructures,
Families, Communities and
the Voluntary Sector
M5C3 Special Interventions
for Geographical Cohesion,
M6C1 Proximity Assistance
and Telemedicine
M6C2 Healthcare
Innovation, Research and
Digitisation
Note: • component significantly contribute to the EU pillar, component partially contributes to the EU pillar
Source: Commission Staff Working Document, Analysis of the recovery and resilience plan of Italy (SWD/2021/165 final)
Within the six Missions there are 133 “lines of investment”. Some of these include interventions that are
quite differentiated, so that these can be more usefully quantified as being at least 157. To these are added
the 30 lines of investment of the Complementary Fund, amounting to an overall total of 187. The lines of
investment vary greatly in size: some amount to over €10 billion, while others are worth tens of millions.
Therefore, any analysis of the Plan’s areas of intervention must inevitably begin by regrouping the specific
lines of investment and by carefully analysing these.
Overall, around two-thirds (62%) of the Plan budget consists of public investments; a fifth (19%) is
dedicated to business incentives and around a seventh (12%) to current public expenditure.
163.2. Implementation
Since the NRRP includes investments that have already been funded and are already being carried out and
given the possibility of including expenditures made in 2020, the implementation of the Plan has already
been under way; this will allow Italy to gradually provide the EU Commission with progress reports and
obtain the next instalments of funding, as happened at end December 2021.
The ways in which the NRRP is implemented are diversified. (1) In some cases, the Plan precisely identifies
the projects to carry out, and therefore also identifies the implementing body and final beneficiaries; these
cases will involve transferring the relative resources for implementation and then monitoring progress of
the projects. For example, this is the case of many investments regarding the railway network, which the
Italian Railway Company (Rete Ferroviaria Italiana) will carry out according to the calendar of the Plan;
another example are the investments in the cultural heritage of the major Italian cities contained in the CF
and of which a complete list is already available. (2) In some cases, a central administration (Ministero) will
directly implement investments, as in the case of interventions regarding the justice system. (3) In some
cases, implementation is linked to a preliminary repartition of resources between Regions and
Municipalities, to be carried out by the national administration (Ministero) responsible for the line of
investment, according to criteria already available, or dependent on implementation legislation yet to be
formulated; for instance, the investment for school buildings, coordinated by the Italian Ministry of
Education. (4) In yet other cases, the national implementing body responsible for the line of investment
will issue calls for proposals, and local administrations will compete to obtain allocation of resources; once
the resources are allocated, the local authorities will be responsible for the implementation stage. This is
the case, for example, of the substantial resources that the NRRP allocates to the creation of nurseries,
and also of many important interventions related to the innovation policy, which will be mentioned below.
(5) Lastly, a part of the Plan concerns “over the counter” interventions: available resources that can be
allocated on demand to businesses (this concerns several measures, one of which is the substantial amount
of funding for “Transition 4.0”) or to private citizens, such as the very large bonus for building renovation
works.
Thus, the implementation process is quite articulated. In several cases, planning activities will be necessary,
both for the measures that are directly carried out by central administrations, and for those implemented
by local authorities that will participate in the calls for proposals. This is challenging because of the very
large number, as recalled, of lines of investment and their very amount. New regulations have been
introduced to accelerate the procedures involved in public investments.
The governance of the NRRP has been defined by DL 77/2021. This provides for a significant number
of bodies procedures, with the creation of a “Control Room” at the Presidency of the Council of Ministers,
with the different Ministers involved and the assistance of a new Technical Secretariat. At the Ministry of
the Economy there will be a "Central Service for the NRRP" to coordinate operations, monitoring,
17reporting and controlling implementation of the Plan. A “Permanent Board of discussion”, with a
consulting role, has also been established with the economic, social and territorial stakeholders.
3.3. Territorial structure of the NRRP
In most cases, the Plan follows strictly sectorial (and not territorial) lines. Compared to the normal
implementation of public policies, it is evident that the role of the Regional Administrations is much less
important; the entire definition process of the Plan followed a top-down approach, defined by the national
executive. On the other hand, the municipal administrations will certainly be very important in the
implementation process. According to a government assessment, “Regions and local bodies are
responsible for a significant share of the investments envisaged by the Plan”, amounting to €87.4 billion
(including NRRP and FC), in particular for Ecological Transition (Mission 2), Inclusion and Cohesion
(Mission 5) and Health (Mission 6). This figure mostly refers to the municipal administrations; the Regional
Administrations should have a role in planning some public network services as for the health service, via
the Local Health Authorities (ASL). However, the municipal administrations will have the crucial
responsibility for planning and implementing many interventions envisaged in the other missions of the
Plan. IFEL-ANCI (national association of municipalities) has estimated that these interventions will
amount to €67.2 billion.
This will pose some very important problems. The municipal administrations across the entire country are
greatly under-staffed, especially when it comes to younger and professionally qualified personnel. This
situation is considerably more pronounced in the South. Equally important problems will arise in the future
when the municipal administrations need to use their own current resources to activate the new services
enabled by NRRP investments. In addition, some administrations face difficulties because they already
have high levels of debt, which restricts their capacity for current expenditure; this includes important
cities like Turin, Naples, Palermo and Catania.
The NRRP has three “transversal” goals: it aims to reduce gender, generational, and territorial gaps. In
order to reduce territorial inequality, the Plan allocates to the South 40% of the total investment. Which
specific investments will be funded by these resources? It is impossible to be certain, yet.
Detailed analysis of all the NRRP and CF investments shows that 22 out of €82 billion will be allocated to
already defined projects in the South. This mostly involves large-scale network interventions, especially for
the railways, already selected and to be carried out by large publicly owned companies like Rete Ferroviaria
Italiana and for broadband connections. There are also specific indications for some measures, of relatively
limited amounts, specifically for the South, like those for the Special Economic Zones (SEZ).
There is no geographical indication in 122 of the 187 NRRP and CF lines of investment. These include
almost all the measures regarding industrial policy (innovation and business incentives) and most
18interventions related to public services. Allocation of these will depend (1) on the demand from businesses
and families for the incentives envisaged in the Plan; (2) on the decisions concerning territorial allocation
of the direct investments by the central Administrations and by their allocation programmes; (3) for a large
extent, on the outcome of calls for proposals to which the municipal administrations will participate and,
therefore, on the criteria used to formulate the calls. On July 15, the government proposed an amendment
to Decree-Law 77 in order to establish the principle that the in calls for proposals regarding the NRRP, a
share of 40% must be destined to the South. The cogency of this legislation remains to be verified, as does
the issue of whether it proves to be more or less sufficient, according to the different investment lines.
4. NRPP, research and innovation: directly linked investments
4.1 The overall picture
To prepare this report all NRPP lines of investment have been analysed, selecting those that show a link
to S3 strategies. It is important to note that the NRPP does not contain any explicit reference to Smart
Specialization Strategies.
Following the methodology previously illustrated, they have been sub-divided into those directly linked
with research and innovation strategies and those that may have an indirect link. Among the former, we
were able to find 46 lines of investment, for a total amount of 40 billion euros (about 17 percent of the
entire Italian NRRP). Due to their contents and orientation, they have been subdivided into 7 groups:
Transition 4.0; Start-up; Research and cooperation with business for research; European programmes;
industrial promotion; promotion tools; intellectual property (Table 5).
19Table 5. Investments of the NRRP with a direct link to research and innovation
Missi Amount (€ Innovation area- Territorial Linkage with
# Component Description Contribution to S3s
on million) related indications S3s
Incentives to firms for the adoption of digital technologies
Transizione 4.0 -Credito di imposta tax credit for new investment in digital
111 1 2
beni materiali
8870
technologies (tangibles)
all no
Transizione 4.0 – Credito di imposta
112 1 2 1910 all no
beni immateriali tax credit for new investment in digital
technologies (intangibles)
Transizione 4.0 – Credito imposta altri
113 1 2 290 all no
beni immateriali
Transizione 4.0 – Credito di imposta tax credit for new investment in digital
114 1 2
R&S
2020
technologies (R&D)
all no
Transizione 4.0 – Credito imposta tax credit for new investment in digital
115 1 2
formazione
300
technologies (training)
all no
Start-ups
121 2 2 Start up nella transizione ecologica 250 venture capital for new “green” firms ecological transition no
122 4 2 Start up 300 venture capital all 27% South
123 5 1 Imprese femminili 400 new firms financing all no
Research and university-research centres-firm cooperation
131 4 2 Infrastrutture di ricerca 1580 PPP for research infrastructures all no
20% ecological
132 4 2 Partenariati/20iomedic di base 1610 40% South
PPP for research activities transition
several innovation
133 4 2 Campioni nazionali di ricerca 1600 40% South
areas
134 4 2 Ecosistemi innovazione 1300 No 40% South
CO Ecosistemi innovazione Sud in contesti PPP for innovation
135 350 no 100% South
MPL marginalizzati
136 4 2 Centri trasferimento tecnologico 350 technology transfer no 40% South
Dottorati innovativi per fabbisogni
137 4 2
delle imprese
600 PhD in cooperation with firms all 30% South
Dottorati innovativi: ricerca, pubblica
138 4 1
amministrazione, beni culturali
432 researchers no no
139 4 2 PNR PRIN 1800 research activities 6 clusters of Horizon no
140 4 2 Giovani ricercatori 600 no no
Didattica e competenze universitarie researchers
141 4 1 500 no no
avanzate
142 6 2 Ricerca 20iomedical nel SSN 524,1 biomedical research health no
20CO
143
MPL
Ricerca sanitaria 500 research (health technologies) health no
European programs
batteries,
151 4 2 IPCEI 1500 participation in EU IPCEI microelectronics, 90% South
hydrogen
152 4 2 Horizon 200 participation to Horizon calls 6 clusters of Horizon 80% South
Sectoral initiatives
161 1 2
Investimenti ad alto contenuto
340 microprocessors no
tecnologico
162 1 4 Sat com 385 space no
163 1 4 Osservazione terra 200 space Basilicata
164 1 4 Filiera spaziale 275 space no
165 1 4 In orbit economy 150 space Basilicata
166 1 4
Tecnologie satellitari ed economia
571 space no
spaziale
167
CO Tecnologie satellitari ed economia
800 space no
MPL spaziale
168 2 2
Produzione impianti energetici
675 energy no
innovativi
169 2 2
Rinnovabili e batterie – produzione
400 energy Puglia
fotovoltaico
170 2 2 Rinnovabili e batterie – Eolico 100 industrial development energy no
171 2 2 Rinnovabili e batterie – Batterie 500 batteries no
172 2 2 Produzione di bus elettrici 300 transportation no
173 2 2 Idrogeno – Elettrolisi 450 hydrogen no
174 2 2 Idrogeno in aree industriali dismesse 500 hydrogen 50% South
175 2 2 Idrogeno in settori hard to abate 2000 hydrogen Puglia
176 2 2 Idrogeno per trasporto ferroviario 300 hydrogen no
177 2 2 R&S nell’idrogeno 160 hydrogen no
178 2 4 Ripristino e tutela degli habitat marini 400 green no
179 2 1 Innovazione nell’agroalimentare 500 food no
Promotion instruments
CO
181
MPL
Accordi per l’innovazione 1000 Increase of financing for Innovation agreements all no
21Competitività e resilienza delle filiere
182 1 2
produttive
750 Cluster contracts 12 industries South
CO
183
MPL
Contratti di filiera agroalimentari 1203,3 Cluster contracts: food food no
Intellectual property
191 1 2 Proprietà industriale 300 Intellectual property strategy all no
Note: ●●● strong link, ●● medium link, and ● weak link.
Source: Authors’ elaborations based on PNRR, regional smart strategies and other official documents
224.2 Directly linked measures: Transition 4.0
The principal NRRP intervention is Transition 4.0, providing tax credits to promote the digital
transformation of Italian businesses (and following on from the previous “Impresa 4.0”) with funding of
€13,380 million. A total of €8,870 million (111) is available for investments in material assets directly
connected with digital transformation of production processes, and a further €1,910 million is available for
intangible assets (112), in addition to €290 million for intangible assets of a “different type” (113). Then
€2,020 million will cover tax credits for research, development and innovation (114); €300 million for
training in digitisation and development of the necessary skills, focusing particularly on SMEs and on
redundant workers (115). The aim is to provide incentives to around 15,000 businesses per year. Past
experience shows that the fruition of these tax credits depends on the size of the business and the sector in
which it operates, and on geography. The regional distribution of the tax credits granted in 2017 was highly
concentrated in Lombardy, Emilia-Romagna and Veneto (Bratta, Romano, Acciari and Mazzolari, 2020). It
is possible to imagine that Transition 4.0 will contribute to further polarisation of the innovation
investments of Italian companies in the three strongest regions.
4.3 Directly linked measures: Start-ups
There are three different NRRP lines of investment in favour of new businesses. The first, (121) “Support
for start-ups and venture capital for ecological transition”, consists of €250 million. It aims to encourage
the growth of an innovation ecosystem (with the focus on sectors like renewables, sustainable mobility,
energy efficiency, refuse treatment, batteries) through direct and indirect venture capital investments. The
intervention has a dedicated fund (“Green Transition Fund”, GTF), and 4 principal areas of action: 1)
indirect investments of €100 million in existent Venture Capital funds; 2) indirect investments of €50 million
in the “pre-seed” and “seed” start-up phases; 3) direct investments of €50 million in the initial and growth
stages of start-ups to consolidate the action of VC funds that are already active; 4) investments in “venture
building” with €50 million.
“Start-up funding” (122) will contribute €300 million to the National Innovation Fund, managed by the
Cassa Depositi e Prestiti to support the development of venture capital in Italy. This will support 250 innovative
SMEs with investments totalling €700 million. The NRRP estimates that the sub-division of the funding
will see 73% allocated to the Centre-North and 27% to the South, considering the current trends regarding
venture capital.
A further measure (123) provides €400 million to support the “Creation of Women’s Businesses”, to
increase the number of women in entrepreneurship, systemising and redrawing the existent measures to
support the creation of business projects led by women or involving a majority of women. The resources
related to this investment will be used to create a “Women’s Business Fund”, to add funding to some
23existent measures, and the new Fund for women in business established by the 2021 Italian Budget Law
(amounting to €20 million per year in 2021 and 2022).
4.4 Directly linked measures: Research and research-business collaboration
Different NRRP interventions will provide direct finance for infrastructures and research activities. One
measure (131) provides €1,580 million for the creation of an integrated system of research and innovation
infrastructures to connect industry with academic research. This will fund the creation or consolidation of
important pan-European research infrastructures and dedicated innovation infrastructures, promoting the
combination of public and private investments. A maximum number of 30 (existent or new) infrastructure
projects is envisaged. If the specific characteristics of the project allow this, research and innovation
infrastructures will be funded and managed through public-private partnerships (PPPs). The public funding
to the PPPs will cover 49% of the total capital investment and personnel costs.
“Extended partnerships among Universities, research centres, businesses and funding of basic research
projects” (Measure 132), has been allocated €1,610 million and aims to fund up to a maximum of 15 research
and innovation programmes, carried out by partnerships consisting of Universities, research centres and
businesses (20% of which will involve green issues).
“Strengthening of research structures ad creation of “national R&D champions” on some Key Enabling
Technologies” (133), envisages investments of €1,600 million to finance the creation of national research
centres capable of reaching a critical threshold of research and innovation through collaboration involving
Universities, research centres and business. Essential elements of every national centre will be the creation
and/or renewal of relevant research structures, the involvement of firms in the preparation and
implementation of research projects, and the support for start-ups and creation of spin-offs. The sectors
chosen for this intervention are advanced simulation and big data, environment and energy, quantum
computing, biopharma, agritech, fintech, digital transition of industry, sustainable mobility, applied
technologies for cultural heritage, technologies for biodiversity. A call for proposals will be published to
select up to five networks of universities, research bodies and companies in any one of the scientific and
technological areas involved.
“Creation and consolidation of "innovation ecosystems", and the construction of "territorial R&D leaders"
(Measure 134) has been allocated €1,300 million. According to the NRRP, innovation ecosystems represent
an innovative model of economic and social innovation: places for collaboration between universities,
research centres, local institutions and society, in order to carry out high-level training, innovation and
applied research. The measure envisages funding 12 “territorial R&D champions” (existent or new) as a
result of a call for proposal. The selection procedure will be directed in such a way as to identify at least
one project per “regional area” (it is not entirely clear what this term means). In relation, Article 1, comma
2, a), no. 4 of the Complementary Fund allocates a further €350 million for “Ecosystems for innovation in
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